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German industry entered the era of mass production around 1870, and the importance of advertising increased in the period after the unification of Germany in 1871 as the number of new companies soared during a short-lived upswing in the economy. However, advertising became even more important in the years of economic depression that followed, and Germany experienced its first massive depression. Advertising became an integral part of companies' sales policies, and companies developed publicity departments for the first time.

The population of Germany rose from 41 million in 1871 to nearly 68 million in 1914, and average incomes rose steadily, allowing more families to afford goods beyond the bare necessities. At first, marketers in Germany catered to the middle-class demand for luxury goods by expanding the range of their products, using advertising to show customers what was available in an increasingly diverse market. By the end of the 19th century, consumerism had become a part of economic and social life.

At about the same time, the notion of a proprietary brand entered the German marketplace; beginning in 1894, the name of a product could be registered with the Imperial Patent Office and thereby protected by law. Food, clothing, cosmetics and tobacco were among the first kinds of products to be branded.

In 1907, Hermann Muthesius' Deutscher Werkbund was established in Munich to create branded fashion articles. At the same time, chain stores and luxurious department stores—such as Wertheim in Berlin, established in 1896—as well as mail-order selling revolutionized the German retail business.

Advertising began to concentrate on the individuality of brands and helped develop new media&mdsh;such as roadside billboards and advertisements on buildings, trams and buses—which joined the traditional posters, newspapers and magazines.

Not everyone hailed the new eye-catching advertising, however. Protests led to federal and state legislation, which, like the laws against unfair competition (passed in 1896 and amended in 1909), placed restrictions on advertising. But the overall tendency was one of expansion, and before the first decade of the 20th century ended, resistance to advertising had ebbed.

Although World War I brought a dramatic decline in commercial advertising, it made politicians and government officials see the business in new ways. They recognized the potential of advertising for propaganda and used it accordingly both during and after the war.

A modern consumer market developed quickly beginning in 1925, when regulations on reparations payments and financial aid from the U.S. helped the German economy recover from its postwar depression and inflation. Advertising became a field of scientific research, with advertisers turning to the science of psychology to optimize the effectiveness of their campaigns. Marketing departments focused on companies' proprietary goods, and ad agencies—most of them branches of U.S. shops boosting the concept of full service—began to expand throughout Germany.

In the 1930s, German companies began to use market research. After the war, German society had lost many of the distinctions that had dominated life during the Wilhelmine period; instead, people enhanced their social status via consumption. While the average income of working- or lower-middle-class families remained below prewar levels well into the 1930s, more people had time and at least a bit of money to spend on leisure activities.

Development of ad agencies

Ad agencies in Germany date to the mid-19th century. The first was that of Ferdinand Haasenstein, established in 1855 in the province of Altona; three years later, it became Haasenstein & Vogler.

The promotion of available space to potential advertisers was the chief function of these early shops; the content and layouts of ads were the province of advertisers, although agencies might offer advice.

Rudolf Mosse changed that arrangement in 1867 with his agency, Annoncen-Expedition Rudolf Mosse, which combined the sale of space with other services. Mr. Mosse was one of the first in German advertising to realize the importance of layout. His clients could turn to a catalog of nearly 2,000 borders and plates or have a layout done for them. On the whole, however, at the end of the 19th century German advertising remained far behind in the services offered, particularly when compared to U.S. agencies.

Annoncen-Expedition Rudolf Mosse continued to expand and added new fields of activity when Mr. Mosse himself became a newspaper publisher in the early 1870s. By the end of World War I, Mosse Group controlled ad space in more than 100 newspapers. That evoked criticism from those who disagreed with Mr. Mosse's liberal stance.

In 1914, to foster the interests of those opponents, Alfred Hugenberg founded Auslandsgesellschaft, which was renamed Allgemeine Anzeigen in 1917. The combination agency-newspaper-publishing group became a powerful rival to Mosse Group.

In the first decades of the 20th century, German ad agencies sought to give their work a more distinctly national character and succeeded, particularly in the field of poster design. Since the 19th century, German posters had been designed in accordance with dominant artistic styles, in contrast to the American preference for photographs and the presentation of an idea instead of a single object.

East and West

In the 1950s, following the partitioning of the country after World War II, a modern consumer market that integrated all classes of society developed in the Federal Republic of Germany. Mass production accelerated, giving the people of West Germany access to a variety of goods and services without parallel. Increasingly competitive home and world markets led to a gradual reduction in prices. The majority of West Germans opted for a retreat into private life. All those factors helped to smooth the way for the development of a modern consumer society.

With the creation in 1949 of the German Democratic Republic (East Germany) along socialist principles, the eastern part of the country developed a rigidly planned economy, although some aspects of a retail market were retained.

With economic development under strict state control and an ensuing concentration on heavy industry, consumer goods for the home market received less focus, producing conditions that were conspicuously different from those in West Germany. Consumers' purchasing power remained low, and many consumer goods were in short supply. While promotional campaigns were used to market East Germany's own branded products, the ad industry gradually declined as it continued to promote goods that were difficult to sell or those intended for foreign markets.

Development in the West

Even after World War II, the call for a distinctly indigenous advertising continued to be raised. Some advertisers in West Germany tried to revive the style of the late 1920s and early '30s, but the West German advertising industry came to follow the U.S. model closely.

After 1949, international agencies began to set up branches in West Germany. Most were U.S. or British shops, including McCann-Erickson, Lintas, J. Walter Thompson Co. and Young & Rubicam.

In addition, some German advertisers of the prewar years reopened their agencies or launched new ones. Hanns W. Brose opened shop in Frankfurt in 1947. Hubert Strauf followed suit with Die Werbe in Essen. The slogan he created for a Coca-Cola campaign, "Mach mal Pause—trink Coca-Cola" ("Have a break—drink Coca-Cola"), became a popular catchphrase and a symbol of the reconstruction era.

In 1954, Hubert Troost established a shop that in the '70s became Troost Campbell-Ewald. Wolfgang Vorwerk, Vilim Vasata, Günter Gahren and Jürgen Scholz began with Agency Team (later Batten, Barton, Durstine & Osborn) and Scholz & Friends. Other new agencies included R.W. Eggert and Zernisch, both in Düesseldorf, and Markenwerbung International, in Hamburg.

The American influence remained overwhelming, however, as many newly created agencies were simply branches of U.S. agencies or mergers. Two prominent examples were Ogilvy & Mather and Doyle Dane Bernbach in Düesseldorf, which at the time was the ad industry center in Germany.

Although U.S. agencies continued to dominate, by the 1960s signs of a distinctly German voice were evident. Advertising professionals such as Michael Schirner and Walter Lürzer, who had begun their careers in U.S. agencies, made German advertising more imaginative and witty, as well as more intelligent.

DDB's campaigns for Volkswagen became especially well known for their creativity. One 1968 spot showed a Volkswagen that drove toward the viewer, passed and vanished into the distance, accompanied by the text, "Der VW—Käfer. Er läuft und läuft und läuft. . . ." ("The Beetle. It runs and runs and runs. . . ."). The ad refrained from giving a technical description or from talking about the assets of the car, instead simply visualizing its message in a catchy way.

Crisis in the '70s

At the end of the 1960s, consumerism fell victim to attacks of being wasteful and advertising was criticized as an instrument used to create false needs. Inflation, the oil crisis of 1973-74, and high interest and unemployment rates operated as checks on people's inclinations to consume. Advertisers reacted by substantially reducing their marketing budgets. In the mid-1970s, the West German advertising industry experienced a crisis.

Many shops were forced to retrench or close entirely; others found merger partners to keep them afloat. Few—for example, Troost, Eggert and Agency Team—expanded, and some even managed successful start-ups during the crisis. Mr. Lürzer and Michael Conrad, for example, set up an agency of their own in 1975.

Overall, the U.S. agencies proved to be the most successful; since they had sources of income in other countries, they were able to extend their share of the West German industry, which had become the No. 2 ad market in the world.

Mergers continued in Germany as elsewhere in the world, and by 1990, only Springer & Jacoby among the top 15 shops in Germany was still solely under local control. In addition, ad agencies came to concentrate almost solely on creating advertising, while marketers devised marketing strategies and the media interacted with separate shops that served as mediators among the media, ad agencies and marketers.

In the 1970s, print advertising was still the trendsetter medium in Germany. Y&R launched imaginative print campaigns for brands and products such as Milka chocolate, MM Sekt, Camel cigarettes and Chiquita bananas. Troost developed an image of youthfulness and vitality for Fa soap, manufactured by Henkel but later marketed by Procter & Gamble Co.

Another development came about due to changes in the political and social climate in West Germany in the 1970s. Oil companies, car marketers and nuclear power providers took up elements of the debate about pollution and showed their commitment to the cause by addressing the problem via "green marketing," which became an important issue to the German public.

By the 1980s, West German society was segmented into a number of separate cultures, each of which consumed to live up to an image or a lifestyle rather than to satisfy a need. Marketers' campaigns integrated a growing number of products into a particular way of life. Both visuals and text emphasized humor and entertainment, and thus "advotainment" made its appearance. The ad industry also devised campaigns against drug abuse, AIDS and later xenophobia. This so-called social advertising was a new kind of communication.

The number and quality of TV spots changed significantly when private channels were authorized in 1984, a development that revolutionized the West German media landscape, and the TV spot superseded print ads.

Contemporary advertising

The reunification of the two German states in 1990 resulted in a movement toward a single German identity. Some East German brands—such as Rotkäppchen-Sekt, Club cigarettes, Club cola and Florena cosmetics—were successful in the transition to a new market economy; many such brands owed their survival to marketing campaigns from imaginative ad agencies.

Tapping a feeling termed "ostalgia" ( "nostalgia for the East"), a harking back to some aspects of the 40 years under socialism—which now seemed acceptable, even attractive—was an effective strategy in the marketing of such products, at least in the eastern part of the country.

One new trend in marketing in the reunified country was the introduction of provocative poster ads. Whereas in the 1970s advertisers operated with understatement, in the '90s they made lavish use of elements that stunned, confused and even irritated their audiences. In addition, a type of sincerity entered advertising directed toward the younger generation of consumers, an echo of campaigns from the 1970s that accepted customers as intelligent and self-determined beings.

While ads in the 1980s stressed that there were really few differences between the sexes, in the '90s ads often showed women playing an active role and men a passive one. The range of roles assigned to German women in ads multiplied greatly, a reflection of their greater freedom in society.

By the turn of the 21st century, nearly 500 million people were employed in the German advertising industry, and the German ad market was estimated to be about $27 billion annually. The Internet was beginning to provide a new medium for the advertising industry, although when compared to that in the U.S., online advertising in Germany was in its infancy.

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